The U.S. trade deficit narrowed a bit more than expected in May as exports jumped to a record high, and the U.S. unemployment rate dropped to its lowest level in nearly six years.
The Commerce Department said on Thursday the trade gap fell 5.6 percent to $44.4 billion, indicating the U.S. economy is benefiting from a strengthening global recovery, data released Thursday showed.
April's trade deficit was revised slightly down to $47.0 billion.
The narrowing of the trade deficit in May followed five straight months of increases.
"The improvement in U.S. exports seen in the May trade data suggests that the world economic recovery is gaining traction," said Tu Packard of Moody's Analytics, as reported by the French news agency AFP.
Exceeded expectations
Economists polled by Reuters had expected the trade deficit to narrow to $45 billion in May from a previously reported $47.2 billion shortfall, suggesting trade could be less of a drag on second-quarter growth than earlier feared.
When adjusted for inflation, the deficit narrowed to $51.96 billion from $53.88 billion in April.
Trade subtracted 1.5 percentage points from first-quarter gross domestic product. The economy contracted at a 2.9 percent annual pace in the first three months of the year.
In May, exports increased 1 percent to a record high of $195.5 billion. Exports were driven by a surge in automobiles, parts and engines, which rose to a record high. Exports of consumer goods were also the highest on record.
Imports fell 0.3 percent to $239.8 billion as petroleum imports tumbled to their lowest level since November 2010. Non-petroleum imports, however, hit a record high in May.
That points to an acceleration in domestic demand, which cannot be satisfied with locally produced goods, and is consistent with expectations of a rebound in growth in the second quarter.
The politically sensitive trade gap with China rose to $28.8 billion from $27.3 billion in April.
Jobless rate
Thursday's report from the Labor Department shows the unemployment rate falling two-tenths of a percentage point to hit 6.1 percent in June.
The study also shows a net gain of 288,000 jobs. The job growth and the unemployment rate are both better than economists had predicted.
An economic advisor to President Obama said it is the first time since 2000 the economy gained 200,000 jobs per month for five straight months. But Jason Furman also said many families are still struggling with long-term unemployment and stagnant wages.
Government experts said job growth was widespread, and strongest in professional services, retail, food services and health care.
The data could be seen as evidence that the world's largest economy is recovering from the effects of unusually harsh winter weather that hurt the economy in the first few months of this year.
The upbeat data encouraged investors, who pushed the Dow Jones Industrial Average above 17,000 for the first time.
During the past year, the number of people officially counted as unemployed is down by 2.3 million, but that still leaves 9.5 million people out of work.
Other job data was mixed. The number of Americans working part time because they cannot find full-time work rose, while the number of people out of work longer than 27 weeks declined.
Some information for this report provided by Reuters and AFP.
